tv First Up With Angie Lau Bloomberg September 30, 2015 7:00pm-8:01pm EDT
angie: anything that pain. the s&p jumps the last in three weeks as a crammed the worst carter since 2011. takes foundations china measures to bolster the economy, cutting down payments for first-time buyers. searching for a solution. google resolves the long-running patent dispute with microsoft. love them to "first up." -- welcome to "first up." i'm angie lau. we have breaking news at the
start of the show. south korea's industrial production rose 0.4% in august from the previous month. economists were expecting a drop of one and a half percent. that is definitely a bright spot for korea, for the year on year factory output rose dear 0.3% compared to 1.8% decline estimate. outperforming what economists had expected from south korea. see how the markets react in an hour. u.s. stocks got a modicum of relief at the end of the worst quarter since 2011.let's go over to new york to get more from su keenan. intoday's rally put a dent>> the most volatile corridor in four years. it was not just stocks but commodities, emerging-market currencies which got hit in the past quarter. many strategies are happy to see this behind us. the worst many can remember in some time. in terms of what happened today,
one said we get is not back. some of the must be in down name, particularly in biotech, rallied as newes york traded oil futures traded higher. but on the quarter they cap the lowest quarterly average since 2009. oil prices are down 24% in the past months. in terms of the bigger picture, investors focused on and listening to comments from said president william dudley. ansaid what we have here is alert to investors that the volatility could get a lot worse. we also heard from the fed chair janet yellen who spoke on community banking. the significant improvement in the economy since then has helped communities and community banks. but i am well aware that the challenges for this sector
continue. and my board colleagues understand this also. dudley was pointing out volatility could get worse as we get closer to win the race -- that it raises rates. we also had a lot of the widely traded stocks that were recently hit hard in the selloff bounceback. google, twitter, amazon posting decent gains. there is some firming under all the volatility. angie: i guess we will get the big crew on friday when we get the big jobs number coming out of the u.s. what are the indications there? su: we got some positive signs. we know the fed policy members are looking carefully at the labor picture. theresearch institute,
private research out with data showing u.s. employers added 200,000 workers to the payroll this month. alternately, we have the chicago area showing contraction. investors are looking ahead with some optimism towards the friday number. a similar report to the one we received today is expected that the september jobs report friday will show the private businesses added about 200,000 workers, and unemployment held steady. angie: su keenan, always good. thank you. back in asia, let's check in on the markets. to new zealand, where we are seeing continued selloff. a quarter of 1% down, ahead of china pmi expected to be in contraction mode. spot holding at 63 u.s.
cents ahead of the fed decision and chinese pmi data. ino counting the opens japan, australia and korea. let's go over to japan. 25, 2.7% in the last close. the previous day was down more than 4%. it is about the 17,000 mark. teachers in chicago pointing to a higher open on this thursday session. showingen is weakening, that perhaps risk could be back on. 119. 91. hong kong and china are both closed for national day celebrations. mainland markets will be close for one week. china, not taking a holiday here. it has taken another step to shore up flowing -- slowing growth. policymakers are targeting the largest part of the economy and it is property. is quite timely,
actually. you mentioned we are starting the long holiday. typically families have time to shop around for apartments. yesterday we talked about cars in the tax cut takes effect today. now it is apartments. basing stepping up and support for consumers. if you look at the measures suddenly the cost of getting married in china is getting more affordable. i used to live there and people were always problematic about, the guy has to get the house and the girls family gets the car. most peoplely, think about the party, but in china you have to have the house. david: that's part of the financial model. that being said, this has it all on the chart. in 2010, they raised the mortgage deposit requirements to 30%. what they have done is brought it down to 25%. that takes effect immediately if i'm not mistaken. that being said, a few other
changes. this is applied to only first-time homebuyers. it is also applicable to cities where you don't have purchase restrictions. it is just the latest step. takentest step china has to shore up the property market. they started out using mortgage policies. if you want to buy a second or third home, you can apply. this one applies geographically. some cities have been hit more than others, so they have removed some restrictions. and of course this is what we were just talking about, reductions in deposit requirements. ubs estimates, the property market makes up over a quarter of the economy if you consider things like furnishings, electrical's. a fairly big chunk. that's what we have.
this is the latest data. showing some signs of life. angie: there is a pulse. let's stay on china. the reported its foreign reserves stated to the imf for the first time, but not fully. this is a move towards transparency. david: correct, it is partial data. they promised to move towards full disclosure in two years. but beijing said if you look at the partial data, that is representative of what our holdings are. it is essentially a breakdown. they have reserves of three and a half trillion. as a breakdown of what part is currency. the imf takes that in china and 95 other countries, coming out with a breakdown of global reserve. 11 and a half trillion is the total. there is allocated and unallocated, the difference is
basically disclosure. this is thechart, key take away. it is still the u.s. dollar that is the main, dominant reserve currency. 64%. 20%.uro, i believe the latest data suggests it was just over 1%. angie: thank you for putting that through today. checking other headlines. volkswagen has started to cut hiring in, and frozen its these out -- diesel admissions scandal. vw financial services will not take on any new staff until at least the end of the year. a member of the supervisory board has told the bbc the company knew about the scandal a year ago, but the board members
were only informed when the story broke last month. the chief financial officer shane elliott replaces mike smith as ceo. he has been with the bank since 2000 out -- 2009. smith steps down at the end of the year. there are reports twitter founder jack dorsey has bowed to the pressure and will stay on as ceo. the tech website recode says he will make his position permanent after stepping in on an interim basis three months ago. dorsey will continue to be at the head of the mobile payments company square. twitter rose more than 5%. microsoft, finally turned the page on their relationship am a putting an end to their long-running patent and videosmartphones games. bloomberg news patents reporter
susan decker has more from washington. susan: google and microsoft have 20 patentdrop infringement lawsuits that were pending against each other in germany and the u.s. some of these cases date back to 2010 at the beginning of the smartphone wars. the case is targeted microsoft xbox and motorola phones, which were at one point made by google. financial terms were not disclosed. relationshipw between the companies that have been enemies for many years. in addition to the end of the litigation, they have decided to cooperate on certain matters, like a new video streaming service being developed with companies like intel, amazon and netflix. also doubt develop and lobby for new rules for a unified patent system in europe. the companies are not going to completely and their competition -- end their competition. they still have fights over search and uggla just introduced --ew chrome tablet that
google just introduced a new chrome tablet that competes with microsoft's surface. the licensing program will continue. angie: that was susan decker. in washington. you can get more on that and all of the day's top stories at our digital destination, bloomberg business. bringing together the best of news, business week and television, all in one address. also on bloomberg.com, tesla's new electric suv is expensive. but all signs are pointing to success. plus, planning to do business in cuba? there is a gatekeeper for an investor -- foreign investors should meet. check it out on bloomberg.com. coming up, up to mystic outlook -- optimistic outlook after the worst quarter in u.s. stocks in four years. a buying opportunity, coming up next. ♪
angie: stories making headlines around the world. russian airplanes carried out strikes in syria two days after president putin called for a coordinated international response to the islamic state. it appeared to catch western leaders off guard while they were debating a common approach. mesko asked u.s. -- moscow asked u.s. officials to keep planes out of syrian airspace. russia says it hit a target including command post, arms depots and military units. iran has promised what is called to consider members against -- measures against saudi arabia after the death of hundreds of programs at hajj. earlier, saudi arabia said it has intercepted an iranian boat carrying weapons for shiite rebels. the state news agency says the claims was a pack of lies. of the putative state
of palestine has been raised at the united nations for the first time. --sident michael sata abide abide said it was a historic moment and hoped it could fly over jerusalem. later he said he no longer feels bound by the accord with israel. he appealed for protection from the people, saying israel has reached arrangements put in place under the oslo peace agreement. let's turn back to the markets. glencore shares bouncing back, extending a record rally. ceo ivan gothenburg called for an emergency meeting, and said the company has absolutely no solvency issues. ralph lauren rose the most in seven months over his restructuring plan since after it was announced someone else will take over as the new ceo. is gap's lossain
in more ways than one. they lost their leader, and the stock was also the biggest loser on the s&p tumbling nearly 6%. s&p 500 rose for the second day, climbing close to 2%. with the senior portfolio manager at russell investments. even just taking glencore as an example, people sold off 29% down. lossesely recouped its over the past two days. is this the kind of buying opportunity that presents itself when we see these kind of dips? it is the right question. i think it is a case though, until we get certainty around, military policy not just in the united states for -- but more broadly, there will be a range.
also taking advantage of debts. we have seen buying opportunities here with sentiment turning towards oversold markets, but the getting outside of this range in the near-term mike beebe challenging until there greater clarity around what is going to happen this year. angie: will we get a big clue when the jobs report comes out friday? guest: without question. that is the data point. we have the fnc in this quantity. -- quandary, do they move this year, next year, october or december? i think october is still alive. interestingly, the fed member dudley made comments. he spoke a little bit more hawkish lee today about moving this year. when we got the announcement from the fnc, attention was pointed to the fact that four members were forecasting the move to come in 2016 with that member chris lakota in 2017.
mosul didn't notice six members did not voice their opinion. people did not notice six members did not voice their opinion. we think it is still in 2016 and the data will drive, and that's where we will be. angie: how is it going to drive sentiment? which sectors will be most sensitive to it? guest: i think rate sensitive parts of the equity market will be the most sensitive because of the uncertainty around the first move by the fnc. given geopolitical tension, looking at energy, and also russia's move in syria today. angie: what else are you looking at when you say diversify your portfolio? are you interested -- introducing a fixed income? guest: of course. at that just like we think about regional
opportunities in equity. in the fixed income portfolio we have to look at opportunities and higher-yielding parts of the diversified portfolio. it is about being nimble. volatility creates opportunities, but it should in a very risk managed and structured deployment. it is taking into account ambient market rates. angie: last time we talked, you noted free building blocks very good portfolio value, business cycle and sentiment. what about value here? our u.s. equities overvalued? if you look outside of the u.s., where can we find bargains? guest: that's right. u.s. equities are longer when it comes to the business cycle as well as the earnings cycle. it is still a very robust place with respect to material downside risk to the economy. we are looking.,
at non-us developed markets. it's maybe a little bit too early to go into emerging markets, given the uncertainty around the strengthening dollar, potentially on the back of a monetary policy move. in europe we see opportunity. today there was a data point i was interesting. inflation data in europe coming in a little bit disappointingly. the market took the bad news as good news, and forming a potential move with respect to quantitative easing by the ecb. we don't think they will increase the qe program but what they might do is increase the amount -- for the duration of the program, which was always on the table. angie: markets might be doing the same thing with japan. the survey coming out this hour as well. doug gordon, good to talk to you. senior portfolio manager out of seattle. on today's edition of highfliers, we will meet the aussie chef who lit aflame under
thai cooking. he was named -- it was named asia's best restaurant. but here is the time he almost ruined the staff in the kitchen in paris. i was telling this guy had to do a stirfry. it has to be intense. you almost have to burn it. they were doing and laughing at the same time as it was flaming. ruined them.have in french cooking, if anything claims it is ruined and they throw it out. angie: delicious viewing tonight at chef david thompson this evening here in asia. it comes your way 6:00 p.m. hong
ability to create an engine that is efficient and clean. ferraris tradition of desirable supercars tromped the latest blow to the auto industry. upcoming ipo is 10 times oversubscribed, then doing for ari at over $11 billion. they valuing ferrari at over $11 billion. electric carmaker in california back on track with a new name. also the name of its $115,000 plug-in hybrid. it filed for bankruptcy but was bought by a chinese billionaire. we are halfway through the rugby world cup group stage with two a northern hemisphere powers in action later today. nams takes on fiji at emily
-- at the millennium stadium in cardiff. in today's other game, france takes on canada. france has reached three world cup finals without winning one. the coach was unhappy with the team performances against italy and romania, and has given the winning his first cap on the wing. the canadian manager, both plays when canada beat france for th ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...)
angie: it is 9:30 in australia. as australia and other commodities currency countries are looking to china. china is the top trading partner for australia, and pmi is out later today, expected to show a continued slowdown. there 30 minutes away from open of trading in australia as well as in japan and south korea. on your tv, mobile and online you are watching "first up."
the top stories this hour. china has moved to strengthen the foundations of the property sector. the central bank has kept minimum down payment for first-time homebuyers run 30% to 25%. it is a first reduction in five years and extends a year of loosening property market, after interest rate cuts failed to reserves -- rebirth a slowdown. google and microsoft has reached an undisclosed deal to end the long-running feud over video game systems and smartphones. dad been wrinkling for five years. google's former motorola mobility unit was amending royalties over the xbox gaming system. u.s. stocks posted their biggest gain in more than three weeks, in the most volatile quarter since 2011. the three main benchmarks closed with strong gains. the s&p 500 rose for a second day after falling within five low.s of its august
it has lost on a 7% since june, the first back-to-back quarterly decline in four years. it is a new month, a new quarter. investors closing a chapter on september, a quarter many would like to forget. the asia-pacific index slumped more than 15%, while the shanghai composite was worst performing index in the world, down 29%. juliet was watching the markets. what are we expecting today? there is a theory that investors come back in droves in october. i guess they will be hoping for a santa claus rally. we have not seen a great quarter at all, this is the regional benchmark index. you can see most of that came in quarter,st part of the particularly on the concern over china and the shanghai
composite. even though i rose i half of 1% yesterday, had a terrible quarter. we have seen investors pull $40 billion out of developing economies in the third quarter, but we were hoping things will be quieter today. hong kong and china markets closed for public holidays. china will be closed for a week for golden week. that will bit giving -- giving a bit of a reprieve. we have seen the deposit for new home buyers cut. they're hoping things will be brighter today. let's look at the futures. we have a positive rally coming through from the u.s. by 5.3% in higher london. a few things helping out the market today. singapore index looking quite positive. australia looking a little flat on the open.
hoping for a little bit more of a reprieve coming through in the month of october. angie: certainly futures in chicago hoping for a higher gain. juliet: adding to the 2.7% gain yesterday. drop. after the 4% but a lot of ego data to digest. yes, the korea industrial production number out, which was much bigger than expected. we also have the trade balance at of korea. in about half an hour we will get exports data for september in japan, and the survey. in 20 minutes time, we have been seeing a lot of japanese data. out of china a very busy day. pmi coming out in an hour and a half. australia and new zealand have
half priced out for september. a busy day china and hong kong markets closed. angie: everybody else digesting it. thank you for that. as julia mentioned, china moves into golden week. has warned of the pressure he is under to maintain growth. world's second-biggest economy, it is not easy for china to maintain a growth rate of around 7% on what is a $10 trillion gdp. it makes things even more challenging to build a better future from this new point. angie: china's recent market turmoil has put a dampener on spending, but millions of tourists are still expected to celebrate golden week. however, things are changing as shery ahn reports. shery ahn: hong kong was a mecca for mainland visitors, but it is losing its luster. pegged to arrency strengthening u.s. dollar is
reducing terms. retail performance in the city as chinese weak, consumers switch to other destinations, especially japan and south korea. weaker yen makes japan more affordable, and visitor numbers more than doubled in august to a record year on year. korea remains a key destination for young people interested in cosmetics and fashion. chinese tourists are expected to jump this holiday season. life bookings during golden week are up more than 30% on year. they seem unaffected by the market route because travel plans were made months in advance. for retailers in hong kong, those focused on local shoppers are expected to fare better than their tourist tears. a jeweler gets more than 60% of revenue from hong kong residents. nomura says there could still be sectors andelated mass-market jewelry. shery ahn, bloomberg hong kong.
angie: in other news, softbank has raised a strike -- stake in sprint. the interest is about a 3%. it underlines soft inc. founders commitment -- the softbank founders commitment to turning the wireless carrier around. sprint posted the third consecutive gain in subscribers in recent quarters, leading him to say he sees the light at the end of the tunnel. maker snap takes a jumped 27% in new york on rumors of a buyout bid from china. the company has rejected a state backed chinese offered that billion, at almost $4 $110 a share. that would represent a 70% premium on tuesday's closing price. declined to comment. apple has launched its music streaming service in china along with e-books and movies.
it is promising a library of content geared to the most important market outside the united states. apple music will be offered as a free three month trial before users are charged 10 yuan a a dollar $.50. in the u.s., we are charged between 10 and $40. protectionist policies and years of red tape have made it harder in indonesia were foreign companies to do business. let's bring in haslinda amin for us. what changes are we looking at here? h the discussion that is happening right now, the new leading assets to identify all policies that need tweaking. haslinda: he told us beef import quotas will between quarterly import restrictions removed, replaced by yearly ones instead. also procedures for importing aircraft parts. they will be simplified. right now, that process is buys
theime and laborious -- process is laborious. but he is scrapping a requirement for goods entering to have indignation labels. it will take time. have been created over decades. it will take time to dismantle this incredible overgrowth of permits, licenses reporting requirements. huge task ahead for indonesia. angie: these policies were meant to protect local industries. what now? he says indonesia has to make sure imports don't hurt the development of local value added industries. he questioned the need to import so much foodstuff for instance. indonesia is a fertile country,
lots of land and freshwater. it drives home the point there are good imports and bad imports. too, he pointed out the need build the country's capacity to process raw materials. that is a way to take advantage for china's eventual recovery. indonesia has to be ready to sell consumer goods. celexa furniture and footwear to china rather than raw materials. new industries must emerge. it will take time. he used an analogy, like turning tinker. super doable but difficult. tanker, doable but difficult. angie: it can be kind of slow. thank you. -- aussiend isaac minor in the headlines after receiving an anonymous bid. that is ahead on "first up." ♪
angie: checking other stories making headlines. the dutch investigation into flight and 817 has been given rush evidence. separatists in eastern ukraine has handed over debris saying they hope it will shed light on what happened. havehundred new fragments been found -- 500 new fragments have been found. rebelight crashed in the controlled region of ukraine killing all 298 people on board. the forest fires causing choking haze in singapore and malaysia will take years to stop. according to the indonesian president, the problem cannot be solved easily. and it will take at least three years to see results. indonesia has sent more than 10,000 police and soldiers to tackle the fires. the air quality in singapore was reported as unhealthy this morning. china has put new navigation
satellite into orbit. it is the 20th the space program has launched, as part of the domestically developed rival to gps. china plans to expand systems to offer global coverage by 2020. welcome to the stock exchange. we are taking a look ahead to the opens of australia, japan and south korea. we had our reporters to tell us what stocks to look at. first trading day of the quarter. a lot of pressure. juliet: it's nice to have september off. reporter: i'm taking a look at delivery. they have a retail store chain.
there are up 33%, but they have been losing the past two weeks. in august they fell more than 13%. the reason i'm choosing the operating profits at 35% to $34 million angie: that is gulliver. david: i'm traveling down. firm, pavingeering that sort ofigns thing. up and down. 1000 employees. the first half just finished. a lot of these companies have a better idea of whether or not there are profits for the year. they think they are going to surpass them, so much so they have raised operating profit forecast close to 17%. 8.7 billion japanese yen. hop.g for a good
mothership juliet: back to the mothership. oz minerals has not had a very down 70%. thisrday it closed, morning a so-called unidentified buyer seeking a 10% stake in the company at three dollars 55, which is a big pickup. the afr industry that saying it could be, the top potential buyers, they are saying it could big private equity firm. they already have a 5% stake in oz minerals. is antified people say it big private equity firm. they are saying they don't have intentions to take a full
but certainly a 10% stake is going to see a big pickup and stocks. three holds and only two sales. angie: a lot of consolidation. juliet: i think we should revisit the quarter, it has been a great one for yvonne man. david: but that is backward looking. don't live in the past. angie: what is the outlook? i will say good, first day at least. angie: put your money where your mouth is. not necessarily money, but at least bragging rights.
angie: the bank of japan has released the latest survey on business cap -- confidence. shery ahn: the survey showing along large manufacturers in the third quarter worsened again. actually missing economist at simmons, they were -- estimates were expecting it to come at 13. this is after rising to 15 the previous quarter, improving for the first time in three quarters in june. but now the data is disappointing again. the outlook on business sentiment for the next three in lineoming in at 10,
with estimates, but still falling for the previous quarter which came in at 16. we are also seeing sentiment along large non-manufacturers beating estimates, coming in at 25. better than the previous quarter and better than economist had forecast. they were expecting to come in at 20. the outlook in line with estimates coming in at 19, slightly falling from the previous quarter. companies across all industries plan to boost capital expenditure by 10.9%. actually a bigger boost than the previous quarter, also beating analyst estimates. we are expecting them to boost 8.7%, and now we are seeing it come in at a boost of 10.9%. the survey is part of that batch will scrutinize at
its policy review next week. of course we have factory output and retail sales, disappointing yesterday. we have household spending coming in tomorrow. all of this will factor in on what the boj does this month. the japanese yen, unchanged at 9.e moment at 119. guest: back to you. of course it is all relative when it comes to the boj. let's get immediate reaction. joining us from tokyo is nicholas smith. peoplent worsening, but are going to spend. how do we break down these numbers? to be honest when i'm looking at that numbers, i'm not particularly worried about the sentiment survey. i'm not a sentimental guy. that thef expect
there. would be weak he saw the industrial production numbers were horrible, the expectations and grower percent dropped half a percent on the month. that is another month they are down. the worry was with weak industrial production, the fact that industry has been building up that companies would push up cap. that does not seem to be happening. so weak, butis people are thinking about bringing stuff back on shore. generally for manufacturing, things have been tough. all year,n saying stay home and party. within japan, things are doing just ok. it is a good environment for making profits. is the west of -- rest of the world that worries me. survey, what i'm looking at is the supply and demand for
people and machines. the bank of japan has been saying, we have a tight supply and demand in this economy. what we are doing is working in the drop in the oil price will help. if we find there's any weakness at all, then the argument is starting to come under pressure. from -- abave heard e's economic advisor saying additional stimulus is an urgent task. do you expect to see additional easing from the boj? guest: i think the trouble with easing is what on earth would you buy even if you wanted to do it? the bond market is badly drying up. there aren't a lot of things the bank and buy that it is not already buying.
i think if at all possible, they will try to hold back from doing quantitive easing. saying, they are going to have to do 3-5,000,000,000,000 yen worth of fiscal stimulus. an increasingly confident that the outlook of the dtp is a second quarter of -- of gdp as the second quarter of decline. looking to next year, remember abe has got to do things by the 25th of july. there is no way he can do another hike, that he has to announce in june next year. he's going to have to find some excuse for pushing that out. angie: that's a great point. of course, he is also shielding from political pressure at home,
2.0.hing abenomics there's questions over whether the first abenomics is even worse -- working. are you still optimistic about the japanese outlook? guest: let's separate the profits from the gdp. look at profits to gdp since the beginning of the series and 94, profits has tripled over that time. profits don't always follow the same track as economic growth. you have to remember the real effects of exchange rate, the fact that japan has been in deflation, that is 54% weaker than 1995. japan is absolutely dirt cheap, as a place to make stuff and also as a tourist destination. nicholas smith, appreciated. thank you for joining us. japan strategist at cls a.
>> i'm fred barnes. >> and i'm mort kondracke. >> way, way to, wait. >> and "with all due respect," we are the original beltway boys. ♪ >> that was pretty good. that was pretty good. [laughter] john: happy national cider day. trump strikes a pose. the fundraising deadlines close. and we turn the tables on our friend, charlie rose. but first, house republicans say